A financial plan, just as any other business, is a vital tool for nonprofit organizations. However, whereas a business plan focuses on the products that the company will offer the client, a charity’s financial plan should focus on the money. It should outline the different types of sources of revenue and the projected amounts for each. It should also list any ongoing expenses, one-time costs for an event and any other capital expenditures. It should also include any contingency plans that the nonprofit has in place in the event that primary market opportunities fail.

The budget is usually prepared by the staff, however it is often reviewed and approved in an annual board meeting. It is then used to monitor and keep track of the progress made on various projects, fundraising success and overall financial status throughout the year. It is essential for a nonprofit to review its budget regularly and compare it with actual financials, and identify where the differences are so that they can make adjustments when needed.

Nonprofits tend to have more expenses than individuals and must be careful to keep their projected income and expense numbers up-to-date. Using a budgeting system, such as the free budget template that Jitasa provides helps organizations keep their financials up to date by making it easy to evaluate actual and projected numbers. Additionally, using financial ratios and calculators can aid nonprofits in making better decisions about how https://www.boardroomwhich.com to allocate their funds.